Only the full Michael 3 takes body morphs - the BLANK is of interest mainly to content creators, not end users, and takes no morphs at all while Mike 3 to Mike 2 has its body grouped like Michael 1/2, which means that the mesh is wrong for the M3 body morphs (head morphs do work though). You should use SR1, the older version was superseded (and make sure you use the updated version of the mrophs or the left limbs won't morph correctly). In order for the morphs to inject Michael must be the first figure loaded into a blank scene - if you have Casual Don or whatever loading by default delete him, save the scene, close and reopen before loading Michael 3.